New rivals in Asean

This year's summit of APEC leaders was held in Vietnam, proof if any were needed of the immense strides that country--still caught in a war seemingly without end as late as three decades ago--had taken in its efforts to harvest the fruits of capitalist progress. Indeed, Vietnam is today a progressive miniature of the Chinese model: a communist government, a capitalist-style economy.

Myanmar and Cambodia are also leaping all over, registering growth rates that leave the Philippine economy sputtering in frustration.

The reasons why we are being left behind by almost every other country in Asia are painfully obvious--but not to our politicians, and perhaps not even to the majority of the Filipino people. It is always easier to look for culprits elsewhere and never at ourselves.

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Editorial, The Evening Paper
Issue of 27 July 1995

It may have escaped our attention, concentrated as we have been on domestic explosions--the developments in the Vizconde and Kuratong Baleleng cases, the continuing saga of Delia Maga and Flor Contemplacion, the May national elections, and the opening of the 10th Congress--that a few of our neighbors have been working very hard of late.

Virtually a procession of Asian hopefuls, earlier swearing to the evils of global trade, is now pounding the drums, spreading far and wide the challenge that they are ready to slug it out in the international marketplace with the best and the ablest of the giants.

Vietnam, the noisiest, has also been the most emotionally stirring, at least for two of the world's biggest consumer markets--the United States and the European Union. So we may as well be ready for the unrelenting flow of guilt money into this communist backwater.

Tomorrow, Vietnam will be accepted into the Association of Southeast Asian Nations as the regional group's seventh member. Much is also being made of the fact that Vietnam, with a per-capita gross domestic product of $220, comes in as Asean's poorest member.

Perhaps not for long, though. Hanoi joins Asean with very high expectations. Increased regional trade and investment are expected to accompany Vietnam's entry into Asean. The Vietnamese government is also confident of its ability to work within the regional group's competitive framework, its rigid tariff-reduction schedules, and its year-2003 deadline for AFTA, the Asean Free Trade Area.

Vietnamese Foreign Minister Nguyen Manh Cam speaks with combined market enthusiasm and pragmatism about his country's decision to join AFTA on January 1, 1996. Vietnam will reduce tariffs at its own pace, he announced. "I believe that with the creativity and skill of the Vietnamese people, and especially the Vietnamese business community, they will overcome all difficulties."

Earlier this week, an even bigger market enthusiastically welcomed Vietnam into the capitalist arena. After two years of negotiations, the European Union and Vietnam signed a landmark agreement defining new frameworks of cooperation in economic affairs, trade, investment, science and technology. Additional help is also promised Vietnam in other vital areas--accounting and auditing, intellectual property, quality standards--all hopefully leading to the establishment of a market economy in the country.

It is clear the Europeans can hardly contain their enthusiasm over the agreement, which they expect to provide them with what they want--a front seat in the development of one of the world's most promising new markets.

A spokesman for UNICE, an association of Europe's top companies, cooed: "For our industrialists, Vietnam is a very important emerging market."

Hardly to be outrun in any trade race is, of course, the United States. Last week, Washington--bowing to concerted lobbying by US business and industry--finally decided to extend diplomatic recognition to Vietnam, closing one of the most bitter chapters in the history of direct US military intervention in Asia.

For Vietnam, the diplomatic recognition is better than a birthday gift. It brings with it two components of a very welcome economic package: US investments that will significantly reduce Hanoi's dependence on the limited capital from regional investors like Hong Kong, Singapore, Taiwan, and Malaysia; and reduced import duties on Vietnamese products entering the US market, especially if Hanoi gets MFN (Most Favored Nation) status.

In 1994, Hanoi enjoyed limited--but nonetheless considerable--blessings from the United States. The lifting of the US trade embargo brought an inflow of $550-million worth of investment. Vietnamese exports to the United States, mainly coffee and fish, totaled $51.9 million. Expect the figures to rise by this time next year.

In fact, expect Vietnam to tally next year some of the most dramatic increases in all areas of global economic activity.

But this should not make us forget other aspiring Asian players, all seemingly engaged in the race of a lifetime. Myanmar, the former Burma, has not only played the first notes of a courting song aimed at Asean, but is also opening its doors to the rest of the world.

Nor is Cambodia to be ignored, either. For more than a year now, it has been actively advertising itself to foreign investors, hoping the lure of influence and power over a fledgling economy would make them prefer putting their money in Cambodia than anywhere else in the world. Phnom Penh can be forgiven for itching to get even just a little of the global funds that are moving so fast around the world. After all, keeping up with a neighbor--busy, buzzing, booming Thailand--can be a real frustration.

Furthermore, there is one giant about to emerge from its long sleep, the prospect of which is enough to ice Asian spines in fear. Inter-Korean business is still consigned to a misty future, but South Korean companies, especially the chaebols, are already sowing the seeds of possible light industrial production in the disciplined, manpower-rich, hungry north.

Our South Korean journalist friends, excitedly trumpeting the growth of a Korea united in trade if not in government, strike apprehension in our minds, enough to send us back to our original calculations in hopes of finding some magic way the Philippines can leap over a young, hungry, market-driven pack of new rivals.

-- NBT